20220712-招银国际-Fixed_Income_Daily_Market_Update_5页_785kb

CMBI Credit Commentary Summary

Core Content Overview

This document provides a comprehensive market update and analysis from the Fixed Income Department of CMBI, focusing on China's credit markets, macroeconomic trends, and recent new issues. It outlines the performance of various credit segments, monetary policy outlook, and highlights key events and ratings changes affecting specific issuers.

Market Performance Summary

• China HY Space: Continued selloff, with CIFIHG Perp dropping 16pts to 40 level and COGARD down 3-7pts. Other HY names like KWGPRO and CENCHI also declined by 2-4pts.
• LGFV/SOE Space: Initial quietness due to lack of further selling from the previous week. Buying interest was lukewarm as investors shifted to AMCs for better RV. However, some offshore Chinese RM offloaded risk in longer-dated BBB papers in the late afternoon.
• Industrial Space: FOSUNI declined 1pt amid weaker market sentiment.
• Macau Gaming Operators: Down 1-2pts due to a 1-week lockdown.

Top Movers

Macro News Recap

• U.S. Stock Market: Closed lower on Monday, with S&P 500 (-1.15%), Nasdaq (-2.28%), and Dow (-0.52%) down. Market sentiment tilted towards recession and the Fed's interest rate hikes against inflation.
• U.S. Dollar: Reached fresh yearly highs before the June CPI report.
• Treasury Yields: Bull-flattened with 2/5/10/30 yields at 3.06/3.05/2.98/3.27%, respectively. The 2s10s spread inverted to -8bps.

China Economy Analysis

• Credit Growth: Continued to rebound due to accommodative credit supply and recovering credit demand.
• New Credit: Total social financing rose 39.7% YoY in June, up from 42.9% in May. New loans to the real sector and government bond financing increased significantly.
• Monetary Policy: Expected to remain accommodative in 2H22 with some fine-tuning. Money market rates may rise slightly, and further LPR cuts are unlikely.
• M2 and Social Financing: Expected to continue growth, but upside room will decline. Local government bond financing is expected to sharply decline in 2H22 due to quota exhaustion.

New Issues (Priced)

New Issues (Pipeline)

Key Events and Ratings Changes

• AGILE Group: Deposited RMB1.5bn for full redemption of domestic bonds due on 13 July.
• AVIC International Leasing: Raised RMB600mn via a five-year corporate bond at 3.13% and proposed RMB900mn three-year MTNs.
• CIFI Holdings: Sold a property in Shanghai for RMB187mn.
• DaFa Properties: Dismissed winding-up petitions against the company and its subsidiary.
• China Evergrande: Extension proposal for "20hengda01" bonds opposed by a main holder.
• Mongolian Mining Corp: Repurchased USD22.12mn of perpetual securities for USD7.742mn.
• Ronshine China: Moody's downgraded CFR to Ca from Caa1 and senior unsecured ratings to C from Caa2.
• Sands China: Extended USD1bn subordinated unsecured term loan with flexible interest payment options.
• Times China Holdings Limited: Fitch downgraded IDR and senior unsecured rating to 'CCC+' from 'B+'.

Disclaimer and Risk Information

• Investment Risks: The report highlights that all investments carry risks and past performance does not guarantee future results.
• No Investment Advice: CMBIS does not provide individually tailored investment advice.
• Conflict of Interest: CMBIS may have investment positions or act as a principal in securities of companies mentioned, which could affect the objectivity of the report.
• Distribution Restrictions: The report is intended for specific investors and may not be distributed to others without consent. It is not an offer to buy or sell securities.

Contact Information

• Fixed Income Department: CMB International Securities Limited
• Tel: 852 3761 8867 / 852 3657 6291
• Email: fis@cmbi.com.hk

This summary encapsulates the main market movements, macroeconomic insights, and key events relevant to the credit markets in China and the broader offshore Asia region.